A Starting Point on Taxes

Every year, right after the Georgia General Assembly gavels out another 40 days of lawmaking, I intentionally schedule Alan Essig, the director of the Georgia Budget and Policy Institute, for my next Citizens Advisory Forum.

I ask him to present on the same thing each time: the budget. Usually, the budget is passed halfway through the Session with little fanfare, especially when compared to the other hot topic bills that are also competing for media attention around that time, like the abortion bill from this year, or HOPE reform from the year before that.

Despite the fact that it’s always the town hall meeting that has more than its fair share of blank faces and glassy stares, I always invite Alan because the budget is the most important document we pass. Putting aside the small sums of money we spend on the programs that most people battle over, the macroeconomics of how much money Georgia takes in, and spends, decides how effective we are as a government.

This concept is just as valid on the federal level, and, in part, is what we’re seeing in President Obama’s push to extend middle class tax cuts last week. His proposed plan is to extend a tax cut, worth an average of $2,200, on the 98% of Americans making less than $250,000 a year, while letting the rest of the Bush tax cuts expire.

This plan also extends tax cuts for 97% of small business owners as well. Even with all the cutting the American government has been doing over the last four years, our budget still needs to take in more revenue than it spends in order to afford all the services that it funds for Americans.

Reducing inefficiencies -- and waste -- in government spending is an important goal, but it’s a goal that should be pursued in order to make a statement about the character of America’s bureaucratic leadership, not to fix the deficit. Since, factually, reducing all inefficiencies related to fraud and waste still won’t counteract the structural problems that our country’s budget faces when it comes to the big line items like Social Security, Defense Spending, or Medicare and Medicaid.

This is why it’s important to start raising revenue for America responsibly. Letting the middle-class tax cuts expire, therefore raising taxes on middle-class Americans by an average of $2,200 will put a serious chill on the already-fragile recovery we’re experiencing.

Yet, this is exactly what’s going to happen because House Republicans are hung up on another of the President’s proposals: letting those same tax cuts expire for the other 2% of Americans who have seen their taxes drop much faster and much lower due to excess influence in our government.

The only way to break the partisan logjam that we’ve been seeing in Washington is to move forward on what both parties can agree upon. So, it’s hypocritical to see these ideological Republicans refusing to move forwards with a tax cut because of an entirely separate plan.

On another point relating to negotiation, it’s also heartening to see the way in which our President is advancing his argument this time around. The criticism from Democrats, that President Obama should have put the cutoff amount at $1 million instead of $250,000, is unfounded; he’s just bidding low by using a dollar amount that is more in line with the earnings of the Middle Class.

The Democrats, who wish he would have negotiated in a much smarter manner during the healthcare debate, are now getting their wish. President Obama is not just a candidate, he is the POTUS. He has to propose real negotiating points that must be worked on, because if he’s reelected, this will literally be the next item he tackles.

Just in time, too, since the macroeconomic imbalances our county is facing are being noticed not only by experts, but the American people as well.